Northern Strategy: 12 NHL Teams in Canada

by Andrew Kulyk & Peter Farrell

Could this scenario evolve?

This week the Buffalo Sabres went to play in a city they had not visited since the winter of 1996: Winnipeg, Manitoba. After a long absence, the NHL has returned to the city of Winnipeg, but the Jets no longer play at Winnipeg Arena, demolished six years ago. These Jets pack the house at the downtown MTS Centre on Portage Avenue, a smallish venue (15,004 seats) that is about as noisy and intimate as one can get.

For almost the entire past decade, Canadians clamored for a seventh NHL franchise in their country. This flew in the face of NHL Commissioner Gary Bettman’s “Southern Strategy,” where he foresaw a geographic footprint for his league throughout the continental United States, and the resulting lucrative TV contract. That plan has failed: The bulk of TV revenues come not from any US-based network but from Hockey Night in Canada on CBC, and the at-par Canadian dollar has teams looking anew at enticing Canadian markets. With Winnipeg now set, there may be a race among two or three teetering franchises to see who gets to Quebec City first.

That would make eight franchises. But 12? Yessiree, says the Mowat Centre, a nonpartisan public policy research center based at the University of Toronto.

Their report, released last year, used Edmonton as a benchmark to rank demographics. They concluded that the smallest of the then six Canadian markets, the “Golden Horseshoe” area, which spans the region from Niagara Falls to the Greater Toronto area, could easily support not two but three NHL franchises. A second team would be based in Toronto, and a third franchise in either Hamilton, Kitchener/Waterloo, or London.

Using their ranking system, they then contended that the league would best be served by adding second franchises in both Montreal and Vancouver, with the new teams sharing their current NHL venues, the Bell Centre and Rogers Arena, respectively. Such a set up worked well in the 1920s and 1930s in Montreal, when the francophone Canadiens and the anglophone Maroons shared the old Montreal Forum. But two teams in Vancouver? The Mowat researchers argue that Vancouver has twice as many high-income households and three times as many corporate headquarters as Edmonton. And its is the third-fastest-growing city in Canada.

The report also analyzed the markets in Saskatoon, Saskatchewan, and Halifax, Nova Scotia. Saskatoon was once a relocation option for the St. Louis Blues. In 2010, the city hosted the World Juniors U20 hockey tournament, and its arena, the Credit Union Centre, seats just over 15,000, the same as Winnipeg. But with a regional population of 400,000, this team would only succeed under the model of being the Green Bay of the NHL. The difference being, Green Bay can rely on nearby population markets of Madison and Milwaukee for support, not to mention a $140 million annual television rights share.

As for Halifax, the smallish population (600,000), the lack of high-income households, only 14 corporate head offices, and no viable NHL-sized arena or plans to build one put them at the bottom of the list.

Since the release of the Mowat Centre study, Winnipeg got its team. Up in Toronto, plans have been unveiled for a new 20,000-seat arena in suburban Markham, which would rival the glitz and glamour of the Air Canada Centre and be ready in time for the 2014-15 NHL season. If Quebecans have their way, their new arena, named the Videotron Amphitheatre, will be up and running one season later. Their current venue, Le Colisee, used to house the Quebec Nordiques and could easily be renovated and serve as an interim home.

From a global perspective, the researchers don’t mince words, accusing the NHL of deliberately restricting access to the hockey product which Canadians crave and systematically ignoring sports business models that work. While citing dual franchise examples in other sports (Mets/Yankees in New York, Lakers/Clippers in Los Angeles), their primary focus is on the success of soccer in the United Kingdom.

Says the report, “The most extreme case of team concentration may be the English Premier Football League, one of the world’s most successful sports leagues, with a huge international TV followership. The league has 20 teams, 18 of which are located in or close to just five major metropolitan areas. There are five teams in London, five in Manchester and environs, four in or near Birmingham, two in greater Newscastle and two in Liverpool. Their structure largely reflects the distribution of that country’s population, which is, like Canada’s, highly concentrated in a handful of urban centers. Having two or more teams in close proximity can divide the fan base, but it can also multiply it, by creating rivalries. NHL fans are, after all, not just going to watch an exhibition of hockey skill. They are going to watch a competition, in whose outcome they are invested.”

How would Buffalo fare if the 12-team Northern Strategy ever came to being? Well, for one, our ticket-buying friends from Welland, Stevensville, and Chippawa would have to add to their collections of seven jerseys. But remember, a ticket to a Calgary game or any Canadian opponent at First Niagara Center trumps a Nashville or Columbus game. Hands down. And that’s a good thing.